The Church of England launches its attack on executive pay
There is a significant statement of intent by the Church of England in the Daily Telegraph letters page this morning.
Heading up a letter from more than a dozen other signficant investors from both religious organisations and secular charitable trusts, the First Church Estates Commissioner for the Church of England makes the following commitment:
The problem of excessive executive pay has become so serious that we have resolved to work with our investment managers to ensure that the remuneration policies of the companies we invest in are aligned with our interests, transparent, linked to performance, and appropriate in the context of each company.
Putting these letters together – agreeing the text and the subtext – doesn’t happen overnight. the term ‘resolved’ means that it has gone off to more than a dozen sets of trustees for review and comment*, and the text is carefully worded to ensure that it’s firm but flexible.
In particular, the phrase “the companies we invest in” leaves room for interpretation: that the Church and others will not just vote against excessive remuneration, but will disinvest in cases where such remuneration packages are voted through anyway.
The commitment to “work with our investment managers” is also important. The investment managers being used by these trusts and groups are also used by a huge range of other investors, meaning that the managers themselves will need to agitate not just on behalf of this core group, but in effect on behalf of a much wider group. The proof of this will, of course, come during the approaching AGM season.
So why is this happening now?
In part, I suspect that there is some genuine cooperation between this group of investors and some of the more ethical investment managers (yes, there are some), who have seen the opportunity to shift the balance of power between one bit of capitalism and another, and decided that now is the time to make the move.
But, while it’s not acknowledged in the letter, I think we should also recognise that this move – not massive in itself, but a step in the right direction – is down to the work done by the Occupy movement.
As a socialist, conscious of how the 1986 movement paved the way for neoliberalism, I think there are significant problems with the Occupy movement, however well-intended. But proto-comradely hats off to them on this one. It’s not exactly what I had in mind here, but it’s welcome nonetheless.
One last thing: my sources tell me this letter is only with the Daily Telegraph (who also accord it an article) because it was refused by the Financial Times. Why, I wonder, would the FT refuse a letter from a set of organisations with roughly £7 billion invested in the City of London?
* I bet the Baptists especially, with their tradition of removal from ‘wordly affairs’, met long into the night on this one.